If you’re not using Purchase Orders my question would be - why not? Granted, if your business is very small at this time and your orders are minimal, then you may have a point. But being an optimist, it’s going to grow so you might as well get used to the benefit now.
Purchase Orders are used to purchase items or in this case inventory from your suppliers. Not only does it start the correct procedure for tracking but it also adds a control factor in your accounting.
Speaking of accounting, once you create your first Purchase Order , QuickBooks will add a Purchase Order account which is a Non-Posting Type. That means the Purchase Order account will not have any impact to your Balance Sheet or Income Statement. Just think of it as a quasi clearing account.
Once you receive the items in full the Purchase Order will be Closed, and will have no further use except in Reports.
You will be surprised how receptive your suppliers are because it makes it easier for them to track and ship an order. On your side, you will know what the total cost will be and the quantity that is going to be shipped or backordered, before you receive the official bill.
Since I made the Inventory and purchase orders active in Preferences, and continuing on with the sample company, I will guide you through the creating of a purchase order.
Starting from your Home screen the Purchase Order icon should be the first icon in your Vendor section. Upon opening this screen you will realize that it looks very identical to Create Invoice.
I am going to add the following into these fields: Template – I need to make sure to use the correct Template which is this case is called Custom Purchase Order. Vendor – Barata’s Building Supplies and Date- the current date that is appropriate. QuickBooks will arbitrarily place the next sequential number in the P.O. No. field and in the Ship To address field, I will key in the address if different from the last site that was used.
Tabbing to the Item field I will select Exterior Materials: Exterior Frame, Qty field 10, and my message in the Vendor message field – Please rush ship this order. To save this I will click on Save & Close.
Your purchase order should look like the example above.
You will notice in the example that their is a Customer field in this purchase order. This could be used if the material was going to be used in a Job. It could later be added directly into a Customer Invoice.
I mentioned earlier about purchase orders and Reports. You can view any or all purchase orders as an Account QuickReport or go to Reports and pick out any of the six Purchases reports that you may need. Since I just created a purchase order, let’s go have a look at the Open Purchase Orders Report.
I can either go to the Report Centre or use Reports from the Menu Bar at the top of the page. I’m going to use Reports from the Menu Bar/Purchases/Open Purchase Orders. You will notice in this example the three purchase orders that are still open, which includes Number 10 which I just completed.
Next up will be Receiving Inventory.
Note:www.quickbookstrained.com is now mobile friendly. From the web address you can choose Options/Mobile formatted and the site will appear in all its living colour for you to view. Check it out.
If you want to make sure you don’t miss an article, then use the RSS Feed button.
Check out the new QuickBooks Trained i am- Facebook page.